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How To Set Key Performance Indicators (KPIs) For Employees

Have you ever worked in a company where you weren’t clear on your goals? Or what should you accomplish to get that internal promotion? Well, many workers find themselves in this situation. The good news is there’s an easy way for companies to address this: by setting key performance indicators for employees. 

But what are key performance indicators for employees? This is a combination of metrics that provide valuable information on which skills, tasks, and engagement activities are expected from their workers. This can help employees understand the organization’s expectations for them. Key performance indicators for employees also allows them to visualize the growth in their career as they complete a set target from their employee scorecard.

A company that sets key performance indicators for employees benefits from doing so in two significant ways. First, it has concrete parameters to evaluate its employees’ performance. Secondly, it gives employees measurable metrics and a clear understanding of what’s expected of them, increasing workers’ engagement with their team and the organization. 

Driving Engagement Up with Key Performance Indicators for Employees

Why should companies focus on their workers’ engagement with the business? According to Gallup, organizations that have a higher employee engagement rate achieve not only “substantially better customer engagement, higher productivity, better retention, fewer accidents, but also 21% higher profitability.” 

It’s easy to understand that logic. The more engaged workers are, the more they’ll put effort into their tasks, skills development, and energy towards the company. So, what are some examples of key performance indicators for employees that companies could work with? People skills, employee productivity, employee net promoter score, employee turnover, participation in the company social activities, absenteeism, and others. 

These key performance indicators for employees are broken down into a list of the qualities, skills, and tasks that form the employee scorecard. Therefore, choosing the key performance indicators for employees starts with a clear understanding of which business activities will impact and be impacted by those set goals and if they meet the business’s long-term goals. 

Monitoring Key Performance Indicators for Employees

These key performance indicators for employees must follow the SMART goals rule, which stands for Specific, Measurable, Attainable, Relevant, Time-bound. This rule allows for effective tracking of the workers’ performance with clear and timely quantitative and qualitative parameters. Without SMART KPIs, it can be challenging to measure a company’s and its workers’ progress in time. 

How can companies collect and monitor key performance indicators for employees? They can do it via anonymous employee satisfaction surveys, one-on-one conversations, or team conversations. Key performance indicators for employees should consider teams, departments, and processes and how each one of them can deliver value for the company. Monitoring key performance indicators for employees can provide valuable insight into how satisfied and engaged workers are in their work, but also what could be improved in their work life.

To get one of the best key performance indicators for employees that can help your team to improve performance every quarter, book a free demo with our performance experts!

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Hey, I’m Shone Fone Ng. I’m determined to make a business grow. My only question is, will it be yours?

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About Shone Fone

Shone Fone is a Serial Entrepreneur for 10 SMEs since 1997, businesses ranging from equipment supply, manufacturing, equipment maintenance and ISO 17025 calibration service, HRM software development and training. He also an award winning entrepreneur of Asia Pacific Top Excellence Brand – Book of The TOP Recognition.

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